Tuesday, April 24, 2007

Singapore's rich splash out with a vengeance

SINGAPORE, April 25 (Reuters) - Celebrity-chef dinners, huge pay hikes, and hot properties with a garage for the Ferrari and a berth for the yacht...some people in Singapore are living it up.

The world's top banks have set up in the city-state, bringing plenty of rich clients in their wake. Now, thanks to a strong economy, a private banking boom, and the prospect of two glitzy casinos opening soon, the big spenders are out in force.

"The good times are back," said Roman Scott, a financial consultant. "There's been a sudden turnaround in confidence. Suddenly, people notice that the economy is growing, they find they can't hire a secretary, and housing prices are going up."

Singapore's immaculately groomed private bankers are having a field day, thanks to the government's policy of creating a one-stop banking centre-cum-playground for the affluent.

The focus on the rich has even spawned a new caste system -- of "high net worth individuals", or those with a mere million in financial assets, and the highly desirable "ultra-high net worth" who have millions or billions of dollars to their name.

Take Charoen Sirivadhanabhakdi, Thailand's richest man, according to Forbes, who listed his whisky and beer firm Thai Beverage in Singapore last year.

He snapped up not just one, but 47 out of 48 flats in a new development for S$205 million, and four entire floors in another project for S$135 million, Business Times reported this month.

Singapore has more millionaire households as a percentage of total households than any other Asian economy, according to the Boston Consulting Group.

Now thanks to all the wealthy Chinese, Indonesians, Indians and Thais who turn to Singapore -- not to mention the Europeans who prefer to park their funds offshore -- there aren't enough private bankers to handle all this money.

Whole teams of "wealth managers" are hopping from one bank to another, lured by promises of ever-higher salaries and payouts.

"There's a shortage of really high quality bankers, so there's poaching and that pushes salaries up," said Chris Claridge, who runs a head-hunting firm.

"Most players are getting 20-30 percent more. One guy, an investment banker, ended up with 75 percent more because two banks were bidding for him. It was like ebay."

CELEBRITY CHEFS AND BUTLER SERVICES

Bankers aren't the only ones getting a big pay rise.

Singapore's ministers, already among the world's highest-paid, just got a 60 percent pay hike, lifting their salaries from S$1.2 million to S$1.9 million ($1.26 million) on average.

The Prime Minister's pay jumped to S$3.5 million ($2.3 million) -- more than five times the U.S. president's $400,000 salary -- while his deputies will each get S$2.45 million. Two former prime ministers who retain cabinet posts will be paid more than S$3 million.

A few weeks earlier, the government said it would address a widening income gap with benefits for the poor. The bottom 10 percent of households had an average annual income of S$3,600 per member in 2006, up 6.6 percent from the previous year.

Ministers and civil servants are benchmarked against the best-paid individuals in professions such as banking, an area the government is encouraging as part of an economic overhaul.

Given the wealth in the financial sector, it's no surprise people are splashing out on expensive meals, cars, and homes.

Indonesian tycoon Oei Hong Leong hosted a S$50,000 charity banquet, flying in celebrity chefs Tetsuya Wakuda and Justin Quek for a 16-course meal that included poached foie gras and steamed tofu, as well as rare vintage wines, the Business Times reported.

Local media this month profiled a local businessman whose fleet of 20 cars includes Bentleys, a Lamborghini, a Ferrari and a Jaguar, and said that one Singaporean had paid S$3 million for a new Pagani Zonda F, a record for a sports car in the country.

Even Singapore's long-stagnant property market is getting a welcome shot in the arm, at least at the top end.

Such gains could start to erode Singapore's competitive advantage for international firms when compared with centres such as Shanghai, Hong Kong, or Tokyo, some analysts warn, while adding to the city-state's inflationary pressures.

Prices for new apartments in prime districts surged 25 percent in 2006, the strongest recovery in years, while landlords are demanding rent increases of 50-60 percent.

"The rental market has gone through the roof," said property agent Bee Bee Tan, with a central flat that rented for S$3,600 now commanding S$6,000 a month, an increase of 67 percent.

As for the millionaires, they can take their pick of projects offering butler services or a doorstep berth for that gin palace.